Friday, March 05, 2010

2010: the déjà vu budget

"Recalibration?"

There were no signs of it in the Throne Speech, and none in the hundreds of pages of budget documentation yesterday. As one observer said during the lockup, "a lot of this is last year." 2010 is, after all, Year 2 of the Harper government's Economic Action Plan. "Same old, same old," says James Turk of the Canadian Association of University Teachers. "A stand-pat budget," says the YWCA's Ann Decter. "84 days to craft a budget that looks just like 2009," says Canadian Union of Public Employees President Paul Moist.

Indeed Budget 2010, it must be said, is hardly a strategic document. Moist finds in it no semblance of an industrial or job strategy. The $125 billion dollar deficit faced by our cities is nowhere addressed. Instead, much like last year, there is blind faith in the private sector to lead us into full economic recovery, considerable corporate and personal tax cuts to offset stimulus spending, and a starry-eyed projection that the current deficit will be eliminated by 2015.

The crowing over the past year's modest and fragile economic gains seems a little overdone. In the past year, 130,000 jobs have been "created or maintained" according to the government. That seems rather modest in the grand scheme of things. Certainly we are doing well among the G-7, but that's relative: we have some distance to travel yet. How does the government propose to assist us?

Apparently by sucking and blowing at the same time. We'll get the promised second year of stimulus--$19 billion worth--but cuts to corporate tax will continue until the rate reaches 15% by 2012--the lowest among the G-7 countries. And $3.2 billion of personal "tax relief" is coming this year as well. Indeed, the government boasts that it will reduce its tax take by $220 billion between fiscal years 2008-9 and 2012-13.

The approach taken again this year includes a sprinkling of funds hither and yon, but there are often more optics than substance involved. Support for education and training, for example, surely a sine qua non in any healthy economy, is to a large extent smoke and mirrors.

An increased allocation of $32 million to the three federal research granting councils comes nowhere close to replacing the $147.9 million slashed from those same councils last year. In fact, as Turk points out, the new money doesn't even cover inflation. The $16 million allocated to the Canadian Institutes for Health Research represent a 2% increase, $13 million to the Natural Sciences and Engineering Research Council is a hike of 1.3% (and only $8 million of that is for actual research), and the piddling $3 million to be directed to the Social Sciences and Humanities Research Council is an increase of less than 1%.

Graham Cox, a researcher for the Canadian Federation of Students, agrees with Turk that there appears to be very little in the budget for students. It's a positive step, he says, to create a handful of post-doctoral fellowships, but in general the government's direction is to provide, in effect, corporate subsidies through the commercialization of research. There are lots of private-sector partnerships proposed, but for all the brave talk of innovation, says Turk, very little attention is being paid to the fundamental, curiosity-based research from which innovation springs. He notes that in President Barack Obama's last budget, 6% was earmarked for such research: "the gap between Canada and the US is growing," he says.

And sometimes what is omitted from a budget can be significant as what appears in it. CAUT associate executive director David Robinson points out that there is no mention of the Canadian Foundation for Atmospheric and Climate Science, which may bring its work--assessing and funding cutting-edge university projects--to an end. Is there perhaps a glimmer of Conservative ideological bias here?

In any case, the private sector, as might be expected with a Conservative government, is rewarded in the budget--but the public sector, not so much. Tariff barriers to foreign investment are being removed, and a Red Tape Reduction Commission is being formed. Free trade is proceeding apace, with agreements to be implemented with Jordan, Panama and the bloodstained Uribe regime in Columbia, whiled new ones are being sought with the European Union and India.

But "this is not a good news budget for the public service or the Canadian public," says John Gordon, National President of the Public Service Alliance of Canada, referring to a freeze on departmental spending in 2011-12 and 2012-13. National VP Patty Ducharme is blunt: while the freeze may not mean layoffs, she said, given the high attrition rate in the public service as baby-boomers retire, the result will be fewer front-line workers, with consequent reductions in service.

And Gary Corbett, President of the Professional Institute of the Public Service, is unimpressed with the proposed strategic review of administrative operations in the public service: these have been going on, he says, since the 1990s, with little to show for it.

Public service pensions have been in the news recently, but there is nothing explicitly in the budget that appears to threaten them. Gordon, however, warns that the issue isn't off the table by any means. Ducharme agrees: "They're warming up to come in for the grab," she says, noting that the government is planning discussions with the unions on the subject. Moist points out that 11 million Canadian workers don't have a workplace pension plan, and that rather than slashing away at public sector plans, something should be done to ensure that all Canadians can retire on a decent income.

Marc-André Vinson, of the Canadian Institute of Actuaries, agrees. There is still no pension strategy for the private sector, he says, which currently presents a fragmented landscape of insufficiently funded plans and various pension regulatory regimes. He was "surprised and shocked" that the budget contained "almost nothing" to address the pension issue.

Does the budget provide any lasting relief for the Canadians who need help most? As was the case last year, the government is tossing funds around almost haphazardly--some green here, some clean energy there, assistance for work-sharing schemes, fixing bridges in Montreal--a little bit of this, a little bit of that. While Aboriginal people are specifically mentioned in the document several times, the amounts proposed to help them seem too small to be effective.

Turk notes, for example, that the K-12 funds to be directed their way represent a whopping 0.8% increase in the current budget--$30 million is to be spent over two years for better elementary and secondary education outcomes for Aboriginal youth. That's maybe $60 a year for every Aboriginal of school age in Canada. Another $285 million over two years will be stretched over 5 areas: the Aboriginal Diabetes Initiative, the Aboriginal Youth Suicide Prevention Strategy, maternal and child health, the Aboriginal Health Human Resources Initiative and the Aboriginal Health Transition Fund.

Arati Sharma, national director of the Canadian Alliance of Student Associations, finds much to like in the budget, but she, too, is critical of the paltry funding for Aboriginal youth, who, she says, represent the fastest-growing population in the youth demographic.

Students are experiencing the highest summer unemployment rate since 1977, she adds, but there seems to be no inclination on the part of the government to address this problem.Women, too, may be getting the short end of the stick. Ann Decter, director of advocacy and public policy for the YWCA, says that the Auditor-General was asked last October to assess the gender impact of the stimulus funding, but was told that such information isn't gathered.

Decter's impression is that the government hasn't been keeping up with social change with respect to women in the workforce. The large infrastructure projects funded last year poured money into the trades, for example, which are 93% male. Childcare is essential to permit women full workforce participation, she says, but the government has effectively left this to the provinces.

Overall, then, Budget 2010 is too little for too many, a budget that marks time. There are no fresh departures in it, little different or new. It's a budget for accountants, said one observer. And CUPE President Paul Moist put it even more succinctly: there's no vision in it, he says. It's a nineteenth-century approach, at the beginning of the 21st.